According to Business Insider, Kalshi CEO Tarek Mansour announced on LinkedIn this past Wednesday that his company is backing a forthcoming bill from Democratic New York Representative Ritchie Torres. The bill aims to explicitly bar government officials from insider trading on prediction market platforms. Mansour stressed that Kalshi already forbids such activity, with rules adapted from the NYSE and Nasdaq, and that trading on material non-public information is a financial crime. This public stance follows an incident where a trader on the competing platform Polymarket made over $400,000 on a bet about former Venezuelan President Nicolas Maduro just hours before his capture was announced. Mansour also argued that regulated markets like Kalshi are being unfairly conflated with unregulated, offshore platforms like Polymarket, which does not explicitly ban insider trading.
The Real Stakes Here
So here’s the thing: this isn’t really about a new law. It’s about legitimacy. Kalshi is a regulated, US-based market that’s been fighting for mainstream acceptance, especially after its high-profile attempt to launch political event contracts. By loudly supporting this bill, Mansour is doing two things. First, he’s painting his platform as the responsible, Wall Street-like adult in the room. Second, and more importantly, he’s throwing a massive spotlight on the wild west nature of his competitors, specifically naming and shaming the “unregulated, offshore” model. That $400,000 Polymarket win wasn’t just a lucky guess—it was a PR gift for Kalshi to illustrate the exact problem they claim to solve.
A Two-Tier Market Emerging
Mansour’s comments make the industry’s split utterly clear. We’re seeing the formal creation of a two-tier system. On one side, you have Kalshi and any future regulated entrants playing by traditional financial rulebooks. They’re banning insiders, implementing know-your-customer checks, and essentially acting like a weird new kind of exchange. On the other side, you have the crypto-native platforms like Polymarket, operating in a legal gray area with a different ethos. Their appeal is often their lack of those very restrictions. The risk for Kalshi? If regulation is too burdensome, all the volume and interesting action might just stay in the unregulated sphere. But their bet is that for real money—institutional money, maybe even corporate hedging—the regulated path is the only one that’s viable long-term.
Who This Actually Affects
For users, this distinction is becoming crucial. If you’re on Kalshi, you’re theoretically trading in a market policed for insider advantage. That should, in theory, mean fairer prices reflecting public knowledge. On an unregulated market, you’re gambling against anyone, including potentially well-connected insiders with non-public info. It’s the difference between trading a stock and betting on a fixed horse race. For policymakers and government employees, the Torres bill would remove any legal ambiguity. But let’s be honest—the real impact is on the platforms themselves. This is a turf war for the soul of prediction markets. Kalshi is lobbying to shape the regulatory environment in a way that benefits its compliant model and cripples its offshore rivals. It’s a classic business move: when you can’t beat them on their own terms, change the terms of the game entirely.
